The new bulk deposit rates will be effective 1 December, Punjab National Bank said. Photo: Mint

New Delhi: Following in the footsteps of the country’s largest lender, the State Bank of India (SBI), Punjab National Bank (PNB) on Thursday raised the interest rate on bulk deposits of over Rs1 crore by 50 basis points. One basis point is one hundredth of a percentage point.

The rate hike comes days ahead of the Reserve Bank of India’s (RBI’s) fifth bi-monthly policy on 6 December. RBI, in its last policy, kept the interest rate unchanged at 6%. The bank has increased interest rates on domestic bulk term deposits of Rs1 crore and above from 4.5% to 5% on deposits of one year and above, PNB said in a statement.

The new rates will be effective 1 December, it said. On Wednesday, the SBI announced the raising of the interest rate on bulk deposits by one percentage point across select maturities. SBI hiked interest rates by one percentage point across all maturities for deposits above Rs1 crore, while rates on deposits of less than that amount were kept unchanged.

The interest rate on the shortest tenor deposit—seven to 45 days—was raised to 4.75% from 3.75% and, for five to 10 years, it will be 5.25%, from 4.25%.